Wise readers who followed The Yorkshire Post business team’s 2015 share tips will be sitting on a stonking 35 per cent profit today, thanks to the excellent performance of our chosen Yorkshire companies in a year when the FTSE 100 fell five per cent.
Those who had faith in city editor Ros Snowdon have enjoyed a 109 per cent rise while deputy business editor Greg Wright’s tip shot up 31 per cent.
Business editor Bernard Ginns saw a 28 per cent rise and business reporter Ismail Mulla enjoyed a very credible 12 per cent increase.
Business reporter John Grainger was not so lucky, with a seven per cent fall.
So what will our top team choose this year?
We’ve chosen an array of Yorkshire firms, from tiddlers to big players.
My share tip this year won’t have many fans among right-on lefties. Provident Financial is a subprime lender, a financial services business that provides credit where others won’t tread. It is also an extremely well-run business. Not for nothing is it the only Yorkshire constituent of the blue chip FTSE 100 share index.Business Editor, Bernard Ginns
Bernard has plumped for Provident Financial, which entered the FTSE 100 last month, ejecting fellow Bradford player Morrisons.
Greg has gone for Tracsis, which promises further expansion and Ros has listened to her retail contacts and plumped for Clipper.
Ismail has backed Sirius and John likes the look of Emis this year.
Here are their reasons why...
Once derided in these columns as a “basket case”, the global project management and technical consultancy WYG repaid my faith in 2015.
Fares in the Leeds-based firm rose by 28 per cent over the year, a very handsome return for any investor.
As 2014 closed, I considered that WYG was a good-looking bet as it was starting to show signs of recovery after a necessarily painful restructuring process to deal with the excesses of an imprudent debt-fuelled acquisition spree in the boom years.
WYG began the year in fine fettle, with strong trading in all its geographies and a double-digit increase in its order book.
Subsequent numbers proved me right as WYG reported a pre-tax profit of £2.2m in the six months to September.
The return was despite delayed approval of the EU budget holding back international revenues.
The group reported a strong performance in the UK. Recent contract wins include the Co-op and the MoD. It won more than 100 new projects under UK framework agreements.
The order book increased to £130m by the end of November and last month WYG said it sees major opportunities arising from the Government’s spending reviews.
Internationally, the group said it is making good progress with activities in fragile and developing states, particularly in Africa.
Congratulations to the management team, led by chief executive Paul Hamer. Another good year beckons.
My share tip this year won’t have many fans among right-on lefties. Provident Financial is a subprime lender, a financial services business that provides credit where others won’t tread.
It is also an extremely well-run business. Not for nothing is it the only Yorkshire constituent of the blue chip FTSE 100 share index.
Keith Loudon, senior partner at Redmayne-Bentley, said: “Provident is now a player in the international field. Many institutions, UK, foreign and some individuals will only invest in top companies.
“Provident has retained the knowledge of the market for small borrowers from 1880 onwards. It has not stood still, it has innovated and changed.
“It is well ahead of the field, with the move into credit cards through its creation of Vanquis Bank and more investors will now be considering Provident.”
Some readers might be wary for other reasons. After all, the share price has more than tripled since 2011 and what goes up must come down. Indeed, analysts at Shore Capital believe that the valuation is becoming stretched.
I’m more optimistic. Competition from payday lenders has faded away as a result of a Government-led crackdown. High street banks have been shrinking their balance sheets.
Consumer trends are also moving in its favour. The rise of online shopping helps its highly profitable credit cards business.
This is a highly profitable financial services business of which Yorkshire can be proud. Just don’t tell Jeremy Corbyn.
Provident’s shares closed 2015 at 3,367p.
Deputy Business Editor
MY share tipping form resembles the career of a talented but erratic footballer.
When I’m at the top of my game, I shimmy around defenders and plant the ball snugly in the corner of the net to gasps of awe. On my off days, I strut around aimlessly and send wayward passes into row Z.
It’s been a career of extremes. Thankfully, 2015 was a golden year. For this, I must thank the management team at Emis, the innovative and far-sighted Leeds-based healthcare software company.
Emis is a prime example of the smart, fast growing firms that Yorkshire keeps producing. I backed Emis in 2015 because its business model was in tune with Government policy.
Emis has repaid my faith magnificently. This year, Emis Group’s fortunes have been boosted by the latest patient apps, that help the public tackle health issues such as diabetes, obesity, depression, irritable bowel syndrome, migraine, giving up smoking and sleep problems. The Leeds-based group is at the forefront of a drive to encourage people to live a healthier lifestyle and reduce the long term burden on the NHS.
The group’s website Patient is attracting around 17 million unique visitors a month and 30 million page views. It’s no surprise that Emis has earned praise from analysts.
As Adam Lawson, at Panmure Gordon, observed in September: “Emis continues to present a clean bill of health.”
With more people living longer, and the public sector facing a spending squeeze, the need for Emis Group’s services can only grow. Emis Group’s shares closed 2014 at 870p. Yesterday, it closed 2015 at 1138p, a rise of 31 per cent over the year.
A performance to be proud of.
So am I on the path to glory, or will my errant ways return? In 2016, I’m certain I’ve picked another winner – Tracsis, the Leeds-based company which produces software that can prevent train delays and derailments.
In 2014, Tracsis, which is a spin-out from Leeds University, was named Tech Growth Business of the Year at the UK tech awards. It’s not hard to see why.
Tracsis’s products allow transport operators to computerise their staff and rolling stock schedules, so they can run their trains more efficiently.
The company has made eight acquisitions since 2008, as part of a strategy to increase its market share. It recently snapped up Ontrac, an award-winning software development and IT company that works with clients in transport, construction, and local government. Tracsis already works with the likes of Network Rail, Arriva, First and Stagecoach, and I believe its fortunes will rise further in 2016 as it powers ahead of the competition.
Past followers of the Greg Wright share tip may feel a little queasy. I endured a painful losing streak for years. But this time I am storming towards the goal with the defence flailing.
What can go wrong? Tracsis closed 2015 at 534p.
I have to admit to being nervous when it came to my share tip last year. As a debutant to the business team, my seat was barely warm when I had to make my pick.
After much swotting, and picking of expert brains, I settled on Servelec, the Sheffield-based technology group which provides software, hardware and services predominantly to the UK health and social care, oil and gas, power and nuclear, water, utilities and broadcast sectors.
Following a dip pre-election, when it reported a three per cent fall in full year pre-tax profits, Servelec rallied to finish the year strongly.
It was boosted by the awarding of a position on a major new procurement framework, developed by business support specialist NHS Shared Business Services, for use across the NHS. Its health and social care divisions went onto win a string of contracts.
Overall, Servelec proved to be a pretty solid tip for a newbie.
The shares closed 2015 at 333.25p, a rise of 12 per cent over the year.
That brings me to my share tip for 2016, and now all of a sudden there’s a little more pressure on me.
Over the past year, I don’t think any business has quite jumped as many hurdles as Sirius Minerals has, as it looked to seek approval for the York Potash Project.
The £1.7bn York Potash Project proposes to mine large volumes of polyhalite – a multi-nutrient fertiliser, helping contribute to global food security.
Last year Sirius received its first two approvals in April from Redcar and Cleveland Borough Council for the mine and mineral transport system and the materials handling facility.
Then it won approval from the North York Moors National Park Authority for the mine and mineral transport system.
The one hurdle that does remain though is financing and this is where Chris Fraser, managing director and CEO of Sirius, comes in with his 16 years of finance expertise in the mining industry.
Sirius made a loss of £4.7m in the six months to September 30 although this was expected following its heavy investment in the project.
Last month the firm cheered shareholders with the news it has signed a major deal with a Chinese fertiliser import business. It penned a seven year deal with Huaken International, which will import polyhalite to China once the mine is up and running.
Paul Smith, analyst at WH Ireland, said: “This is further testament to the demand in the marketplace for multi-nutrient fertilisers of which polyhalite is a naturally occurring variant.”
Mr Smith issued a buy rating for Sirius and I’m fairly confident that polyhalite will light the way for Sirius in 2016.
Sirius’s shares closed 2015 at 14.75p.
MY PICK for 2015 was Brainjuicer, a company aiming to re-invent market research by using behavioural economics to “turn human understanding into business advantage”.
Perhaps I needed a little more of that kind of wisdom before I picked it, because its price has fallen over the year.
To be fair, it went up fairly sharply in March and stayed in very healthy territory right up until it published its interim results towards the end of September.
Brainjuicer revealed that there had been slight growth in revenues, but profit before tax had fallen by 25 per cent and the dividend had been held at 1.0p.
Founder and “chief juicer” John Kearon pinned some of the blame on a shift in the company’s strategy, which he said “should bring benefits in the future”.
He added: “We believe we’re on track to meet market profit expectations for the full year, but have to inject our usual caveat: we have little revenue visibility and plenty of volatility within individual clients, and so cannot anticipate with any certainty how our results will unfold in the short term.”
The market didn’t like the sound of that, and as a result the share price immediately fell by over 8 per cent.
It’s fallen further since, flatlining for the last month and ending the year seven per cent down at 356.5p.
For 2016 I’m going for something safer. Indeed if was Greg Wright’s tip in 2015 when it showed a 31 per cent rise.
Emis Health may be listed on the junior AIM market, but it’s shown all the credibility of a more established stock over the last year.
The Leeds-based company was founded in 1987 by two GPs who wanted to computerise medical records to improve patient care.
Emis Health, which rebranded from Emis Group in June, now provides pharmacy management systems, surgery management software, retinal scanning and IT services to medical companies.
This kind of thing is now big business, and, with no shortage of ill people, or, importantly, healthcare providers seeking to streamline operations, the sector looks set to grow even further over the coming years.
Valued at around £675m, Emis Health has become the UK market leader in primary care software and services, with 53 per cent share of UK GP market and a growing presence in community, child and mental health.
Along the way it’s picked up more awards than you shake a digital thermometer at, profits have grown every year since it listed in 2010, and its dividend has been increasing correspondingly.
As a result, its share price, boosted by acquisitions and strong results in September, has risen 28 per cent over the last 12 months, and there’s every reason to think the trend will continue.
Emis closed 2015 at 1,138p.
As the YP’s City Editor, I’m expected to be able to predict which of our Yorkshire companies will fare well in the year ahead so I’m very relieved to see my share tip rise 109 per cent this year. Thank you Avacta!
Diagnostics specialist Avacta, which makes devices to speed up and reduce the cost of drug development, has had a dream year thanks to its Affimers invention, a hi-tech alternative to antibodies.
The Wetherby-based company has made swift progress in the early commercialisation of Affimer molecules and it has a good pipeline of orders.
The firm recently raised £21m to support development of the first therapeutic Affimers.
CEO Alastair Smith said that “2015 has been a really good year for us. It’s been a year of very significant commercial and technical progress.
“I’m extremely optimistic and excited about 2016. We’ve learned so much about Affimer performance.”
He added that 2016 was going to be a really good year.”
On top of the human potential, new research suggests that Affimers could have significant commercial application for cereal crops.
The firm said new data from the University of Copenhagen shows that Affimers can improve disease resistance in barley, one of the world’s major cereal crops. This could give Avacta a chance to break into a new sector.
This year I’m going for Clipper Logistics, the firm that distributes goods for blue chip retailers such as Asda, Morrisons, John Lewis and ASOS.
Profits have soared at the Leeds-based group in its first year as a listed company after it signed contracts with big name clients such as Harvey Nichols, New Look, Tesco and Zara.
As companies become more reliant on the internet for future sales, Clipper is in pole position to benefit.
John Lewis’s latest weekly sales figures show a decline in trading at most of its stores, but it enjoyed a 25 per cent increase in internet sales. With the rapid increase in mobiles, tablets and other devices, online shopping has never been easier and Clipper is set to benefit.
In UK fashion retailing, between 25 and 40 per cent of goods are returned and the level is as high as 50 per cent in some European countries.
Clipper said that all returned goods needs to be checked, reprocessed, repacked and sent back as stock for the next customer in a very timely fashion to ensure the goods can sell at full margin and in the right season.
The group’s founder Steve Parkin said: “It is a very key issue for today’s retailers, which have to process returns and refund the money almost as quickly as getting the original delivery processed and out the door.”
Clipper’s shares closed 2015 at 293.5p.